Bonds Facing First Q1 Loss Since 2006

By Michael Aneiro

It’s been a yo-yo first quarter for bond markets, with yields pushing higher periodically only to retreat amid a series of stock pullbacks and Cypriot bank runs. The end result could be the first negative first quarter for a broad bond benchmark, – the Barclays Aggregate Index – since 2006. That index shows a -0.13% return for bonds in the first quarter, and unless bonds pull off a Good Friday rally (particularly improbable given that many markets are closed) they will finish the quarter in the red.

Checking on some sector-specific indices as of Friday morning, Treasuries have returned -0.44% in the quarter, with long-term Treasury total returns at -3.59%. High-grade corporate bonds returned -0.11 and mortgage-backed bonds returned -0.05%.

On the positive side of the ledger, junk bonds returned 2.85%, agency mortgages returned 0.06% and muni bonds returned 0.42%.

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